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    Calculating Expected Return, Std Deviation of Stock J/Market

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    The market and Stock J have tire following probability distributions:
    Expected Returns
    Probability rM, rl
    0.3 15% 20%
    0.4 9 5
    0.3 18 12
    a. Calculate the expected rates of return for the market and Stock J.
    b. Calculate the standard deviations for the marker and Stock J.
    c. Calculate he coefficients of variation for the markdt and Stock J.

    © BrainMass Inc. brainmass.com November 24, 2021, 1:47 pm ad1c9bdddf
    https://brainmass.com/business/finance/calculating-expected-return-std-deviation-of-stock-j-market-193568

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    Solution

    Market

    Probability (p)

    0.3 0.15 0.045 0.135 0.015 0.000225 0.000067
    0.4 0.09 0.036 0.135 -0.045 0.002025 0.000810
    0.3 0.18 0.054 0.135 0.045 0.002025 0.000608
    ...

    Solution Summary

    Solution shows step by method to calculate Expected Return, Standard deviation and coefficient of variation for Stock J and Market.

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